06
Aug

4 Ways Fraudulent Travel Expense Claims Can Be Recognized

Fraudulent Travel Expense Claims, expense filing, Expense Manager, employee expense tracker, travel reimbursement, travel expenses, business trip expenses

An audit of Indian Railway tickets by PDCA made a stunning revelation: most tickets submitted for reimbursement were fake, and a significant fraud of inflated hotel bills was observed. In another case, the Central Bureau of Investigation filed a charge sheet against a parliament member who allegedly fleeced Rs 23.71 lakh from the parliament against fake airline boarding passes1. Such frauds often go unnoticed over a long time before a company can realize the loss, and they are more common than you might think!

A survey conducted in 2016 revealed that 3.58% of the incidences of the fraud claims globally were only observed in the Asia Pacific region2. It’s no surprise then that expense management is one area that companies find challenging to manage and keep under control. 

This happens because nearly 48% of corporates operate with a non-existent system for employee travel expenses3. Manually tracking time and expenses of employees is certainly not an option; 55% of companies reported their inability to audit past expense data. There’s no doubt that adding a digital means for tracking employee business trip expenses could help reduce human errors, but until that happens, here are a few ways how these frauds manifest.

  1. False Commute Bills – Employees may take public transport or hitch a ride with a friend but will befriend a cab driver to ask for blank bills. The amounts and dates of travel are diligently entered and submitted to the Accounts Department for[RT1] travel reimbursement. 
  2. Car Hiring Policy – If your company has a car hiring policy, it can be a good practice to mandate and monitor the make and model of the car being hired so that the rent doesn’t come as a surprise. After all, this policy exists to offer convenience to valued employees, as they navigate a foreign city, not as a luxury. 
  3. Personal Relations – It is a human tendency to give special treatment to certain people in our lives, and that extends to our colleagues as well. To tackle this, without adding negativity to the workplace, you must make rules as black and white as possible. For every job role, make sure that the reimbursement limits and terms and conditions are clearly specified, so there is no room for foul play. 
  4. Phone Bills – Producing exorbitant international phone bills is another way of bumping up expense reimbursement. It’s important to be cognizant of this and monitor not just the final bill, but also the plan selected, add-ons used, and plan summaries that detail usage. 

Automated Expense Manager– Tighter Control is Here!

An automated employee expense tracker like Tess360 can resolve most of these issues with its built-in APIs that apprises employees of their entitlements and pre-approves or rejects budgets for activities selected by them via the expense management tool. The Accounts Department will be able to enjoy fewer paper bills and thus reduce dependence on manual checks and balances!

The OCR feature in Tess360 is an excellent example of an AI-enabled travel management system. The OCR feature, empowered with intelligent character recognition, scans every invoice in real-time, for instant expense filing and reimbursement, thereby eliminating fraudulent bill submissions at a later date, when it becomes harder to track.We would be eager to give you first-hand experience to see how it can transform travel for your business. Please connect with us on sales@samara-tech.com  or click here to schedule a demo.  


 

1 https://economictimes.indiatimes.com/articleshow/52528872.cms

2 https://www.rgare.com/knowledge-center/media/research/rga-2017-global-claims-fraud-survey

3 https://www.thehindubusinessline.com/companies/companies-are-losing-huge-sums-to-fraudulent-claims/article25229634.ece